Lendlease partners with Japan’s Daiwa House on build-to-rent
Lendlease and Daiwa House will develop a 45-level build-to-rent tower, the final piece of the Australian company’s Melbourne Quarter project and its second BTR project at home.
The deal to develop the $650 million building, like Lendlease’s first 443-unit BTR project in its 5.5-hectare mixed-use precinct at Brisbane Showgrounds, is a standalone investment and separate from efforts the ASX-listed company is making to establish a broader BTR partnership that will include multiple assets.
The transaction – Daiwa House’s first involvement in Australia’s growing build-to-rent market – also marks a deepening involvement in local housing by Japan’s largest home builder, which in 2014 joined a venture to develop Sydney’s 300-apartment Flour Mill development in Summer Hill and which in 2017 acquired NSW volume builder Rawson Homes.
“We are committed to broadening our development footprint in Australia and welcome the opportunity to further expand our global relationship with Lendlease to deliver to the Melbourne community this quality build-to-rent opportunity,” Daiwa House Australia chief executive Koji Morishige said.
For Lendlease, which like rival developers such as Mirvac, is aiming to tap global pools of capital to fund BTR development at scale, the tie-up with Tokyo-listed Daiwa House widens its relationships with potential funders in this country.
The two previously paired up to develop the 41-storey mixed-use Claremont Hall educational and residential building in Manhattan.
Lendlease, which has long invested in BTR in the more established UK and US markets was sounding out potential investors for third-party equity to invest in what could expand into a 5000-apartment portfolio, The Australian Financial Review reported in March.
“Daiwa House’s investment in our build-to-rent project in Melbourne further strengthens the relationship between our two organisations as we bring the best of our shared global expertise to this development opportunity,” Lendlease Australia CEO Dale Connor said on Monday.
“This announcement highlights continuing demand from our Japanese partners for high-quality opportunities across our global project pipeline – in total, we’ve now secured Japanese investment in projects totalling approximately $11 billion in end development value.”
The 797-unit building sitting between Flinders and Collins Streets will be the final part of Lendlease’s Melbourne Quarter urban regeneration project, on land in the historic Batman’s Hill precinct adjacent to the city’s nodal Southern Cross rail station.
Work on the all-electric building targeting a 5-Star Green Star Design & As Built v1.3 rating is due to start next month and residents will take occupation in early 2026.
With a mix of office and residential towers, Melbourne Quarter will accommodate 14,000 workers and more than 3800 residents upon completion, Lendlease said.
In the six months to December, the company completed the 44-storey residential East Tower, in which it holds an equal stake with another Japanese developer, Mitsubishi Estate Asia.
Residents in the BTR building will be able to use amenities including a 25-metre lap pool, bowling alley, karaoke and music studio and co-working space, the companies said.
There would also be virtual sports and games rooms, a cinema, fully equipped gym with spa, sauna and steam rooms, as well as a dedicated on-site concierge, they said.
